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The market value of property is the price that a piece of real estate could sell for in the current market situation. Whether you are buying or selling a property, it is possible to estimate the market value of the property. An official market value of property can only be assessed with an appraisal conducted by a professional appraisal, but coming up with an estimation is a possibility to send you in the right direction for purchasing a property or listing it for sale.

1.

Conduct research. Gather local real estate magazines and local newspapers that have a real estate section. Review the classified sections for properties similar to the subject property that are currently listed for sale, as well as those that have sold recently. Similar properties include property styles--single-family, townhouse, condo--and those that have similar square footage.

2.

Calculate the square footage price. Divide the list price or sales price of the similar properties by the number of square feet the property has to determine the price per square foot. The answer provides you with an estimate on market value for one square foot. For example, if the similar properties have 1,100 square feet and are selling for $100,000, then the price per square foot is $90.91--$100,000 divided by 1,100 square feet = $90.91.

3.

Estimate the market value. Multiply the number of square feet in the property you are considering buying or selling by the square foot price you calculated in Step 2. This provides you with the estimated value of the property. For example, if the property you are assessing has 1,000 square feet, then the estimated market value of the property is $90,910--$90.91 times 1,000 square feet = $90,910.

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Warnings

Supply and demand plays a role in market value of a property. The higher the demand and the lower the supply of properties, the higher a property seller can demand in price. The lower the demand and the higher the supply in properties can drive the market value of the property down, so that the buyer can offer a lower offer.

Many consumers believe that amenities can drastically drive up the market value of the home, but market values of properties are primarily driven by the square footage and market conditions. For example, a home with a pool can be a price seller or not. If a prospective buyer is interested in a pool then this may add value to the home for this particular buyer. If the potential buyer does not want to have the maintenance and cost responsibilities of a pool, then the value of the pool to this buyer is zero.

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About the Author

Kristie Lorette started writing professionally in 1996. She earned her Bachelor of Science degree in marketing and multinational business from Florida State University and a Master of Business Administration from Nova Southeastern University. Her work has appeared online at Bill Savings, Money Smart Life and Mortgage Loan.